Dysfunction In Indian Insolvency And Debt Recovery: Why Laws Change But Problems Persist
- IJLLR Journal
- Jun 2
- 1 min read
Kushagra Sharma, Chanakya National Law University, Patna, Bihar.
ABSTRACT
India's journey in reforming its insolvency and debt recovery system has been marked by a recurring pattern: ambitious legislative reforms consistently fall short due to underlying structural weaknesses and institutional unpreparedness. Despite successive interventions, from the summary procedures of Order 37 of the CPC and the specialized Debt Recovery Tribunals (DRTs) under the RDBA, to the creditor-empowering SARFAESI Act and the resolution-focused Insolvency and Bankruptcy Code (IBC), the core issues of rising Non-Performing Assets (NPAs), slow enforcement, and overburdened judicial bodies persist. This article argues that the disconnect between well-intentioned legal frameworks and their on- ground execution stems not from flaws in legislative design, but from a persistent failure to adequately equip and integrate the supporting institutional infrastructure, stakeholder discipline, and enforcement mechanisms. The analysis highlights that genuine reform requires a shift in focus from merely enacting new laws to strengthening systemic readiness, enhancing regulatory coordination, and ensuring accountability to bridge the persistent gap between legal promise and practical reality.
